1. Field of the Invention
The present application relates to a transactional credit system and method, more particularly to a system and method for a second credit card issuer to provide transactional credit to a cardholder customer of a first credit card issuer to complete a financial transaction, that is not a cardholder customer of the second credit card issuer.
2. Background
Many merchants allow consumers to make purchases and payments (collectively “financial transactions”) using credit cards. Bankcard associations set interchange rates that are collected as a percentage of a transaction amount for each credit card transaction at the credit card's applicable rate. An acquiring bank (i.e. a financial institution that contracts with a merchant to provide a credit card processing account and settle electronic transactions) sends credit card transaction and purchase information to a the bankcard association, who then forwards a portion of that revenue to the credit card issuer. The merchant's acquiring bank is charged the interchange rate for a consumer transaction by the card association.
Since interchange rates vary, a merchant may accept the credit card of one card association, but not another, based at least in part on the interchange rate levied by the card association for credit card transactions.
Customers are interested in having their credit cards accepted for payment, and are usually not concerned about the merchant's costs or expenses. For example, when a merchant only accepts the Credit Card of credit card Issuer Number Two (hereinafter “Issuer #2”), the merchant may lose a sale if the customer only has a credit card of Credit Card Issuer Number One (hereinafter “Issuer #1”). This is true even when the customer's credit card from Issuer #1 is a “major credit card”, the customer's credit card account is in good standing, and the credit card's available balance is sufficient to otherwise complete the financial transaction.
Therefore, a need exists to provide transactional credit from Issuer #2, to a credit cardholder customer of Issuer #1, who does not have a credit card account of Issuer #2, when a merchant accepts the credit card of Issuer #2, but does not accept the credit card of Issuer #1. The term “transactional credit” includes an amount of credit sufficient to complete a single proposed financial transaction, including any additional fee (e.g. convenience fee, transaction fee, etc.) that may be charged for providing the transactional credit.
Additionally, many consumers close credit card accounts when they believe that they will not need the credit card any longer. However, it happens sometimes that these consumers may “max out” their remaining open credit card(s) (i.e. use all the available credit on a particular credit card), or need a particular issuer's credit card to complete a credit purchase. Therefore a need remains to reactivate a consumer's closed credit card account, that a merchant will accept, to complete a financial transaction, when the account was closed in good standing.